The Oil price has come under pressure due to demand concerns and the expectation of an oversupplied market. Economists at Commerzbank analyze Brent’s outlook.
Oversupply unlikely to materialize
As Saudi Arabia is likely to maintain its voluntary production cut beyond the end of the year, only a modest supply surplus is on the cards for the Oil market at the beginning of next year.
There is even a supply deficit on the horizon for the second half of 2024 due to rising demand, which would allow Saudi Arabia to reverse the production cut.
Overall, the price of Brent Crude is expected to recover to $85 per barrel in the first quarter of 2024 and to rise further to $90 per barrel by the end of 2024.
Source: https://www.fxstreet.com/news/brent-to-see-a-recovery-to-85-in-the-first-quarter-of-2024-commerzbank-202311200751